Record High Consolidated Gold Sales
- US$16.4 Million in Revenues from Gold Sales ($16.3 Million Attributable)
- US$4.0 Million Adjusted EBITDA from Gold Mining Operations
- 14,018 Ounces of Gold Produced (13,900 Ounces Attributable)
- 92% Increase to Attributable Measured and Indicated Gold Resources (Inclusive of Reserves)
- 3 Gold Mines Operational and in Production
- Advancing an Additional Gold Mine into Production in 2011
- Advancing 3 Open Pit Gold Exploration Targets on a Priority Basis in 2011
- Targeting 38,000 to 40,000 Ounces of Annualized Consolidated Gold Production by the Fourth Calendar Quarter of 2011
- Mid-term Target of 100,000 Ounces of Annualized Consolidated Gold Production by 2014-2015
TORONTO, Dec. 23 /CNW/ - New Dawn Mining Corp. (TSX: ND) ("New Dawn" or the "Company") announced that its financial results and corresponding Management's Discussion and Analysis for the year ended September 30, 2010 have now been filed on SEDAR and are also available to view on the Company's website at www.newdawnmining.com.
The Company prepares its consolidated financial statements in United States dollars and in accordance with Canadian Generally Accepted Accounting Principles ("GAAP").
Attributable ounces are the ounces calculated on the basis of the Company's proportionate ownership of such ounces, after adjusting for the minority interests' share of gold production from the Central African Gold Plc ("CAG") properties (see discussion of "Total and Attributable Ounces" below).
Fiscal 2010 was a successful year of growth and development for the Company, both internally and externally. The Company generated net income before income taxes of $1,303,676 and completed the acquisition of an 88.7% controlling interest in CAG, which owns substantial gold mining properties in Zimbabwe.
Adjusted EBITDA, a non-GAAP measurement, totaled $4,003,453 for the fiscal year ended September 30, 2010 (see table under "Non-GAAP Measures" below).
Offsetting these positive results were the significant period costs related to the acquisition of the 88.7% interest in CAG, together with the substantial costs associated with stabilizing CAG's operations in Zimbabwe and implementing the re-engineering of management structures, process and reporting systems. The Company expects that these costs will abate and/or normalize during 2011.
The acquisition of CAG, discussed in more detail in the September 30, 2010 Management's Discussion and Analysis, has substantially increased the Company's potential, increasing measured and indicated resources by 92%, (inclusive of reserves) and bringing under the Company's control five mining properties and a large portfolio of exploration properties in Zimbabwe. The upside potential of these assets, to be developed and operated using New Dawn's established knowledge, experience and operating methods has, in the view of Company's management, provided a substantial step towards realizing the Company' s goal of becoming a mid-tier gold producer.
At September 30, 2010, New Dawn had three gold mines in operation, consisting of its 100%-owned Turk Mine, and the Old Nic Mine and the Dalny Mine that New Dawn acquired as part of the CAG transaction in June 2010, which resumed production during the quarter ended September 30, 2010.
Looking forward to 2011, New Dawn expects to resume production at one additional mine acquired in the CAG transaction, the Golden Quarry Mine in the Gweru gold camp. New Dawn is targeting 38,000 to 40,000 ounces of consolidated annualized gold production from all of its mines by the fourth calendar quarter of 2011, and has a mid-term target of 100,000 ounces of consolidated annualized gold production by 2014-2015.
"In fiscal 2010, New Dawn recorded increasing revenues from gold produced primarily by the Turk Mine in Zimbabwe. The most notable event in the past year occurred in June 2010, when New Dawn acquired an 89% controlling interest in Central African Gold Plc, which is a transformational event for New Dawn. With the completion of the CAG transaction, New Dawn increased its gold reserves/resources by over 90% with the acquisition of 5 past producing mines and a portfolio of highly prospective exploration ground in Zimbabwe. New Dawn currently has 3 gold mines in production, and is planning on restarting operations at one additional mine owned by CAG which was a past producer, in the coming year. New Dawn is targeting on doubling its run rate by late 2011 to 38,000 to 40,000 ounces of consolidated annualized gold production," commented Ian R. Saunders, President and CEO.
"Additionally, in 2011, we have established an aggressive exploration budget for 3 high priority targets exhibiting significant open pit potential near the surface in the oxide zones of former producers. We expect that 2011 will be a very exciting time for our Company, and we look forward to reporting continuing progress to our shareholders."
The following table sets forth selected consolidated financial information for the Company for the fiscal years ended September 30, 2010, 2009 and 2008, prepared in United States dollars and in accordance with Canadian generally accepted accounting principles. This selected financial information should be read in conjunction with the Company's consolidated financial statements, including the notes thereto.
|Fiscal Years Ended September 30,|
|Net loss for the year||(786,123)||(3,737,594)||(2,471,066)|
|Basic and diluted loss per common share||(0.02)||(0.13)||(0.09)|
|Cash dividends per share||Nil||Nil||Nil|
|Quantity of gold produced (oz)||14,018||6,967||8,651|
|Quantity of gold sold (oz)||14,089||6,029||8,651|
|Intercompany loan repayments paid from Zimbabwe||$2,936,455||$395,105||$150,000|
|Cash costs per oz(1)||$671||$622||$641|
|Quantity of gold produced (oz)||13,900||6,967||8,651|
|Quantity of gold sold (oz)||14,004||6,029||8,651|
|(1)||Cash costs per ounce, adjusted EBITDA and attributable measures are non-GAAP measures, as more fully described in the discussion below entitled "Non-GAAP measures".|
The Company has included within this press release and its MD&A, EBITDA, adjusted EBITDA, cash costs per ounce and attributable measures, which are non-GAAP performance measures. These non-GAAP performance measures do not have any standardized meaning prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures presented by other companies.
The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors may find this information useful in their evaluation of the Company's performance. Accordingly, these non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Set out below are definitions for these performance measures and reconciliations of the non-GAAP measures to reported GAAP measures.
Total and Attributable Ounces
Total ounces represent the total ounces under the control of the Company and its subsidiaries and includes 100% of such ounces. Total ounces are presented consistent with the method of consolidation of the accounting information provided in the Company's consolidated financial statements, in which the Company and its subsidiaries, both wholly-owned and partly-owned, are considered an operating unit with adjustment for the minority interest based on income after provision for income taxes.
Attributable ounces are the ounces calculated on the basis of the Company's proportionate ownership of such ounces, after adjusting for the minority interests' share of gold production from the CAG properties. Accordingly, any financial information based on attributable ounces is a non-GAAP measure.
The information shown below is for the fiscal year ended September 30, 2010. For the fiscal year ended September 30, 2009, as all properties were 100% owned by the Company, total and attributable ounces were the same.
|Ounces of gold sold||13,667||277||145||14,089||14,004|
|Ounces of gold produced||13,447||391||180||14,018||13,900|
EBITDA and Adjusted EBITDA
Earnings before interest expense, income taxes, depreciation and amortization is a metric that is used by some readers to measure cash earnings without the distortion arising from both varying capital structures and different tax legislations that apply in different jurisdictions. It is different from cash flow from operations appearing in the consolidated statement of cash flows in that it does not take into account interest expense and tax payments or changes in non-cash working capital. It is also different from free cash flow in that it excludes the cash required to replace capital assets (capex).
The Company takes the view that stock-based compensation, impairment expense and impairment recovery, all of which are non-cash items, should also be excluded in arriving at this measure. Included in the table below is EBITDA as typically calculated, as well as Adjusted EBITDA that excludes certain additional items.
The reconciliation to EBITDA and Adjusted EBITDA starts at net loss for the period shown on the consolidated statement of operations.
|Years ended September 30,|
|Net loss for the period||$(786,123)||$(3,737,594)||$(2,471,066)|
|Amortization and accretion||959,053||721,763||1,176,283|
|Allocation of loss to minority interest||(174,666)||-||-|
|Overhead of non-operational properties||713,047||-||-|
Cash costs per ounce
The Company has adopted the definitions that were published by the Gold Institute for operating costs per ounce in order to enhance comparability with other mining companies. Cash costs are derived from the statement of operations and include operating costs such as mining, milling, refining and transportation, by-product credits, royalties and production taxes but exclude exploration costs, depreciation and depletion, reclamation and mine closure costs, and gains and losses from foreign exchange. Costs are based upon production activity.
|Years ended September 30,|
|Quantity of gold produced (oz)||14,018||6,967||8,651|
|Cash cost per ounce||$671||$622||$632|
(For additional information, see cash costs per ounce discussed in the section titled Non-GAAP Measures in the September 30, 2010 Management's Discussion and Analysis).
About New Dawn …
New Dawn is a Zimbabwe-focused junior gold company currently expanding gold production at its wholly-owned Turk Mine and, with its June 2010 investment in which it acquired an 89% controlling interest in Central African Gold Plc ("CAG"), New Dawn is targeting consolidated annualized gold production of 50,000 to 60,000 ounces within the next 18 to 24 months, increasing to 100,000 ounces of consolidated annualized gold production within the next 4 to 5 years.
Having recently filed a new NI 43-101-compliant mineral reserve and resource estimate for the CAG properties, New Dawn's total attributable mineral reserves, including its Turk Mine, increased 32% to 220,000 ounces of gold grading 3.81 g/t from 1,785,000 tons of mineralized material. The attributable mineral reserves are comprised of attributable proven mineral reserves of 109,400 ounces of gold grading 3.69 g/t from 874,700 tons of mineralized material and attributable probable mineral reserves of 110,600 ounces of gold grading 3.78 g/t from 910,300 tons of mineralized material.
Additionally, New Dawn's total attributable measured and indicated mineral resources (inclusive of attributable mineral reserves) increased by 92% to 1,558,400 ounces of gold grading 2.37 g/t from 20,436,000 tons of mineralized material and New Dawn's total attributable inferred mineral resources increased by 54% to 552,600 ounces of gold grading 4.95 g/t from 3,477,000 tons of mineralized material. (Reference: New Dawn press release dated October 19, 2010)
Presently, New Dawn operates 3 significant gold camps in Zimbabwe, where it owns 6 mines, 3 of which are currently producing gold and expanding production. Ultimately, New Dawn's objective is to become a leading gold mining company in Zimbabwe, active in both gold production and gold exploration, by employing modern mining techniques and deploying capital in a country that is geologically rich, highly prospective, and vastly under explored.
The TSX has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.
The contents of this news release were supervised and reviewed by Ian R. Saunders, B.Sc., who is President, Chief Executive Officer, and a Director of New Dawn Mining Corp., and who is a Qualified Person within the meaning of NI 43-101.
Special Note Regarding Forward-Looking Statements: Certain statements included or incorporated by reference in this news release, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements. The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among others, risks relating to reserve and resource estimates, gold prices, exploration, development and operating risks, political and foreign risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs and dependence on key employees. See "Risk Factors" in the Company's Annual Information Form - 2010. Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise.
For further information: For further information:
Investor Relations Contact: Richard Buzbuzian +1 416.585.7890
President and Chief Executive Officer: Ian R. Saunders +1 416.585.7890
Visit us on the internet: http://www.newdawnmining.com or
Email us at: [email protected]